Legendary investor Warren Buffett advises to be fearful when others are greedy, and be greedy when others are fearful. One way we can try to measure the level of fear in a given stock is through a technical analysis indicator called the Relative Strength Index, or RSI, which measures momentum on a scale of zero to 100. A stock is considered to be oversold if the RSI reading falls below 30.In trading on Wednesday, shares of ITT Educational Services, Inc. ( ESI - Get Report) entered into oversold territory, hitting an RSI reading of 29.5, after changing hands as low as $6.37 per share. By comparison, the current RSI reading of the S&P 500 ETF (SPY) is 49.6. A bullish investor could look at ESI's 29.5 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. The chart below shows the one year performance of ESI shares: Looking at the chart above, ESI's low point in its 52 week range is $3.6611 per share, with $28.93 as the 52 week high point — that compares with a last trade of $6.41.
More from Stocks
Tesla Reportedly to Raise Prices on Its Cars Sold in China Amid Trade War
Tesla will increase the prices of its cars sold in China starting Friday, a report says.
Dow Futures, Trade Talks, Disney, Target and Tesla - 5 Things You Must Know
U.S. stock futures jump on Monday after Donald Trump says China contacted U.S. officials on Sunday and said 'let's get back to the table'; durable goods orders for July will be released Monday; Walt Disney and Target to create 'shop-in-shop' Disney stores at 25 Target locations.
White House Claims Trump Regrets Not Raising China Tariffs Higher
Sunday evening, U.S. stock futures were lower following comments over the weekend on trade with China.